March 15, 2007 2:54 PM PDT

Cisco makes big bet on Web conferencing

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What's more, WebEx is sold as a subscription service, which is a business model that Cisco has no experience selling. Giancarlo said he sees potential in expanding subscriptions to other parts of Cisco's business. For example, the WebEx service could be used for selling security services or other unified communications services. But Giancarlo said it was important for Cisco to have a team that understood how to make such a business work.

"The market is far enough along that trying to acquire a string of pearls wouldn't be competitive," he said. "Secondly, when we go into new areas that we've never been before, like providing subscription services, we feel it's important to acquire the experience of a company that is already executing well."

Cisco used a similar strategy when it first started addressing the home networking market, which sells products through retail stores. Cisco had never had a retail presence. So it bought one of the biggest brands in the home networking market, Linksys, to figure out how to sell low-margin products and sell them in stores like Best Buy and Fry's Electronics.

In addition to gaining market share and subscription service expertise, Cisco is also getting important technology that fits into its current product strategy. WebEx's on-demand collaboration service, which includes online meeting, Web conferencing and video conferencing applications, is a nice complement to Cisco's unified communications products, which also promote collaboration among workers.

WebEx's service is also ideally suited for small and midsize businesses, which may not be able to afford expensive video conferencing gear. Cisco already generates about 25 percent of its business from this market.

But most important, WebEx will keep Cisco on par with its largest rival and most important partner in unified communications, Microsoft. The desktop software giant announced its acquisition of a Web conferencing company called PlaceWare in January 2003. The product later became known as Live Meeting, and also became the foundation for Microsoft's Live Communication Server, which competes directly with Cisco's unified communications products.

"Microsoft has stolen much of the thunder from Cisco of late in unified communications," Kerravala said. "And it's fair to say that Cisco was lagging here. Microsoft bought PlaceWare and Citrix bought Expertcity years ago. So online, real-time communications has been a part of other companies' visions for a while."

In addition to complementing Cisco's unified communications products, the WebEx service and technology will also work well Cisco's "telepresence" products. In October, Cisco introduced a new videoconferencing package called Cisco TelePresence Meeting that's designed to bring a new level of quality to videoconferencing so participants feel like they're actually sitting in the same room with people who may be halfway around the world. Because WebEx already offers application collaboration, Giancarlo and team say, it could easily work well with companies that are meeting virtually via Cisco's telepresence rooms.

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7 comments

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Money pit
I don't think Cisco realizes that they've just spent billions on a money pit. I had a dismal experience today trying to use WebEx to demonstrate a software service to a group of highly qualified prospects.

After 20 minutes, only half the attendees could access the session. Another 15 minutes on hold with WebEx tech support yielded nothing more useful than an apology from a call center in India for WebEx' "latency" due to a "general outage".

If Cisco wanted to buy a position in the software-as-a-service industry, they should have bought a company that doesn't give SaaS a bad name.

I think it will take Cisco's best engineering resources and a big chunk of their treasury to make this flakey, overrated service work. I know I've used it for the last time.
Posted by dlwhite46 (4 comments )
Reply Link Flag
Dirty little secret Cisco won't tell you.
Want to know the truth about Cisco and streaming? They charge
an arm and a leg for something you can get for free. Cisco uses
(Apples) Darwin Streaming Server software on their Cisco
streamiing solution (content manger and content engines) along
with others. Darwin is FREE software that can be downloaded
and put on about any server and you can stream and do live
video broadcasting for free. So, Cisco spending millions so they
can lock you into a prioriety sytem, no way.
Unfortunately IT department rarely understand this technology
and get sold a bill of goods from Cisco reps to purchase their
hardware. I know because this what I do and unfortunately our
IT staff purchased Cisco solution for 90K just because Cisco sold
it. When we starting configuring the system, we found out that it
uses either MS software, Real software or Darwiin to stream.
They will tell you all about MS and Real and how much it costs
per stream per month but unless you really push them they
don't usually tell you about streaming QuickTime. See you can
stream QuickTime for FREE with about as many streams as you
can push through their pipe. Of course they don't get a kick-
back that way.
So to make a long story shorter. You can download Darwin from
Apple's site and put it on any server/box and then stream
unlimited streams for FREE. But, if you want the best solution,
buy a Apple server (only because it makes configuring it easier)
for a couple grand and stream Quicktime. It's the best tool for
creating rich content. If you want live broadcasting? By a Mac
laptop for 1K and download the free broadcaster and your in
business.
No, I don't work for Apple or Quicktime. I just don't see the need
for spending money when it's not needed. Save the money for
your employees health care expenses.
Posted by istreamvids (1 comment )
Reply Link Flag
Making Money From OSS?
Whoda thunk it. I guess you feel that RedHat, SuSE, etc. are ripoffs, too?

-tom
Posted by ferricoxide (1125 comments )
Link Flag
They Can Be Spotty.....
But, overall, my experience has been decent. Our company has been able to host demonstrations (anywhere from 30-100 participants). However, what we use it for the most is providing support to customers. Sometimes, it's just a lot easier, when supporting someone 1000Mi away, to just take control over their desktop (or even just see what they're seeing).
Posted by ferricoxide (1125 comments )
Link Flag
Why! eAuditorium web conferencing is better & is free
Why would CISCO spend 3 Billion Dollars on Webex when Netdive's eAuditorium web conferencing is far better and it is free. You just pay for Support. So it is delivered on same business model as MySQL. That is you get the software for free and
just pay for support. eAuditorium is way better because it has the most user friendly interface and Voice conferencing & Application Sharing are
seamlessly integrated in. You can check it out
here for yourself:
<a class="jive-link-external" href="http://www.netdive.com/indexea.htm" target="_newWindow">http://www.netdive.com/indexea.htm</a>
Posted by Dean_Ansari (61 comments )
Reply Link Flag
I'll tell you why
Tell you what: use the one that I coded myself. It's also free.

Just kidding. But my point is, they bought WebEx because everyone knows WebEx and almost everyone uses it. I've never heard of eAuditorium, despite the fact that I spent quite a bit of time recently reviewing web conferencing solutions for a proposal. By buying an established market leader they don't have to spend the additional money to force their way into a well established field of competitors.

It's called "A Good Business Decision"
Posted by VTAlum (30 comments )
Reply Link Flag
tribe.net has been down solid for nearly a week...there is rumor it was back up Tuesday night for a while, but when I tired to get on again, the browser -any browser -cannot locate the servers. Why is Cisco buying new things when it can't even manage what it has acquired? What is going on? Does anyone inside tribe.net or the parent companies have any news for tribe.net community subscribers?

We were told in advance tribe would be down for 24 hours, that was set up for last Thursday. Due to frequent outages this year, I joked to my friend "that means they'll be up Sunday" . Sure enough, on the cute whale page that gave periodic time estimates of when tribe would be back, the date got pushed to Sunday. I'm not sure exactly when, but then any attempts to go to tribe.net resulted in either error messages/connection lost or "server not found". THEN we finally had tribe's normal outage page, orange on white, so that was a good sign or so we thought. They claimed to be "waiting on a part", with changing estimates of when it would be up again. I was at school Tuesday night when my friend in California emailed me privately to let me know that tribe.net was indeed up at last. I got the email this morning, but by then, we were back to (name your browser) cannot locate the server at tribe.net
sigh.....

Does anyone know anything? People keep asking if tribe.net is dead permanently. I keep telling them it is just growing pains....but is anyone behind the scenes actually doing anything? "HELLO-o-o-o-o, IS ANYBODY OUT THERE?" I fell like I'm in a Pink Floyd song....but not comfortably numb.

Better yet, does anyone want to hijack tribe.net's great social networking community to another site for adults that actually WORKS ??? No way are most of us going to Facebook or MySpace or other kiddie sites....we are a bunch of tribes without a home...not wandering but wondering....is anyone listening?
Posted by firebird22 (1 comment )
Reply Link Flag
 

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